RBI to inject Rupee liquidity through long term USD/INR Buy/Sell Swap auction

Accordingly, it has been decided to conduct a USD/INR Buy/Sell swap auction of $5bn for tenor of 3 years on March 26, 2019.

Mar 14, 2019 02:03 IST India Infoline News Service

Reserve Bank of India logo
In order to meet the durable liquidity needs of the system, the Reserve Bank has decided to augment its liquidity management toolkit and inject Rupee liquidity for longer duration through long-term foreign exchange Buy/Sell swap in terms of its extant Liquidity Management Framework.

The US Dollar amount mobilized through this auction would also reflect in RBI’s foreign exchange reserves for the tenor of the swap, while also reflecting in RBI’s forward liabilities.

Accordingly, it has been decided to conduct a USD/INR Buy/Sell swap auction of $5bn for tenor of 3 years on March 26, 2019. The details of the auction are as under:
Swap Amount
(USD Billion)
Auction date Auction Time Near Leg/Spot Date Far Leg Date
5 March 26, 2019 9.30AM-11.00AM March 28, 2019 March 28, 2022

The market participants would be required to place their bids in terms of the premium that they are willing to pay to the Reserve Bank for the tenor of the swap, expressed in paisa terms up to two decimal places.

The auction cut-off would be based on the premium. The auction would be a multiple-price based auction, i.e., successful bids will get accepted at their respective quoted premium.

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